Month: January 2019

How much does a house in Milan cost? Prices on the rise and quick deals. High demand for new houses

24 January, Corriere della Sera

House buyers in Milan are demanding. They’re hard to satisfy. They want customised newly-constructed apartments. As a result, the most recent real estate projects are leading sales, according to a survey by Abitare Co. Considering also urban renewal projects and house extensions, the percentage of new houses is very high, more than in the other Italian cities (25% of the total market). Prices for this segment are growing at double the speed of the other properties of the sector (+2.2%), houses sell extremely quickly (3.7 months on average). Besides, sales in the last years rose by 14.5% (in comparison with the 1.1% increase in the domestic market). “Milan is the first real estate market in Italy, and the outlook for 2019 is positive. We must be cautious, considering the recession threat, but this city is a different story altogether”, commented Alessandro Ghisolfi from the Abitare Co. research centre.

“Milan is today in the same condition as London was ten years ago. The city has a lot of potential, and it’s a great investment opportunity also for those who do not intend to move to live in the property”, confirmed Sigest. Also Scenari da Immobiliari is cautiously optimistic. Milan anticipates the economic trends and differentiates more and more its neighbourhoods: these are the reasons for its growth. The requalification, except for the areas along the new M4 metro line (especially Viale Indipendenza and Piazza Vetra), mostly concerns the artsiest neighbourhoods (some streets in Lambrate) as well as those with a lively nightlife (Brera). On the overall, Città Universitaria (the student district) reported the best performance. It’s the sign that students are driving the sector for what concerns sales and not only rents, as we can see in the Bovisa area and in the new Bocconi campus.

Concerning new construction, Ghisolfi continues, “the offer is still limited in comparison with the potential demand. This resulted in quicker sales, something that would have been impossible a couple of years ago”. For instance, between Via Tacito and Viale Umbria, the 210 apartments of the Milano City Village project implemented by the listed company AbitareIn (which will be ready only in 2021), have already sold out in a couple of months, way earlier than expected, for a value of 78 million euro. According to Sigest, “if we continue in this way, the supply Milan might not be able to satisfy the demand in five years”.

Source: Corriere della Sera

Translator: Cristina Ambrosi

Oaktree negotiating the acquisition of the Portopiccolo village

26 January, Il Sole 24 Ore

The American fund Oaktree is currently active in the big hotels’ sector in the main Italian cities. After the portfolio of 16 hotels of Castello Sgr, for which the fund as an exclusive for their purchase, Oaktree is allegedly at the advanced stage of the negotiations also for another portfolio.

This second portfolio concerns Portopiccolo, a small area in the Gulf of Trieste, in the former limestone cave of Sistiano. Oaktree is currently negotiation with the construction company Rizzani de Eccher to enter the area and possibly to develop it further.

Rizzano de Eccher is the ower of Portopiccolo. The project has seen the company participating first as a contractor, developing the area. Later, the company also became the administrator by acquiring the majority shares from the fund Rilke, due to a 120 million credit towards the previous owner.

Portopiccolo is one of the most important environmental requalification projects carried out in the past few years, amounting to an investment of 350 million euro on a surface of 350 thousand Sq m which includes residential properties, luxury hotels, shops, restaurants, a beach club, three swimming pools, over one hundred dockings for boats up to 25 metres, and a large Spa.

Source: Il Sole 24 Ore

Translator: Cristina Ambrosi

Real estate investments are discouraged by uncertainty and scarce quality offer

25 January, Il Sole 24 Ore

Italy is going through a positive phase concerning real estate, although investments have considerably reduced from 2017. This is a summary of 2018 as it was presented at the 26th edition of the forum organised by Scenari Immobiliari which will take place in Santa Margherita Ligure on 14th and 15th September.

As the memo reads, “The uncertainties over the fiscal and employment policies have deterred the market. This slowdown is also due to the lack of quality product on the residential (where the offer dropped by 10%) and the non-residential market, especially in big cities”.

Despite the investments in the first semester – nearly 2 billion euro, two-thirds of which on the office and commercial segments – are almost the half of those registered last year for the same period, the international investors still have a positive sentiment towards Italy. The Italian institutional investors (funds, insurance companies) carried out investments for little over than one billion (-48.2% per year). “Investors are not escaping from Italy, at least not for the moment. It’s rather a natural reduction after an extraordinary year such as 2017, also due to the lack of quality product”.

One of the emerging trends is the growing interest in Rome, especially prime properties to turn into hotels. “Certainly, international investors, especially non-European ones, have become more cautious due to the increased political risk”.

Prices for office properties continued dropping in the first semester of 2018, having decreased by 0.5% from the end of 2017. The outlook is negative also for the end of the year, forecasting a 0.3% reduction from 2017. Rents have also decreased, with the only exception of business districts.

The commercial segment recorded better results, with shops and high-street as the main drivers with growing prices. In the first semester of 2018, prices for small distribution reported positive results for the first time since 2007, with a 0.2% growth over the second quarter of 2017. The trend is meant to consolidate and to further grow by 0.5% by the end of the year.

The first semester registered 290 thousand residential transactions, reporting an 11.5% increase from the first semester of 2017 when they were 260 thousand. The outlook is for an additional growth throughout the rest of the year, reaching 600 thousand transactions, namely 8.9% more than 2017. We must remind, however, that these transactions generally concerned the existing stock.

The consistent reduction of prices has encouraged transactions. Prices further decreased by 0.2% compared to the first semester of the previous year, resulting in a positive outlook for the transaction trend for the end of the year. Milan is still the leading market in Italy in terms of prices and transactions, while Rome is recovering.

The sales outlook for 2018 is positive and estimated at 125 billion euro, 5.3% more than the previous year. Forecasts are positive for all the market segments, after nearly ten years.

Scenari Immobiliari president Mario Breglia commented: “The trend of the real estate market is becoming increasingly similar to the financial one. The general political uncertainty, especially for what concerns the taxation and real estate issues that continue to not being addressed, has slowed down the purchases by investors and families. It would be helpful to give a clear signal about what the economic policy for real estate would be, as the sector represents one-fifth of the domestic GDP”.

The 26th edition of the Scenari Immobiliari forum is titled “Change the world”, and it focuses on the current climate, political and economic global changes. During the event, Cdp will be awarded Excellence 2018 “for its role and commitment in promoting the territory and the attention on the sustainability and the ethics of its projects”.

The need to re-establish a balance between human activity and the planet means re-inventing the spaces where people live, work and produce. The impact of buildings constitutes 35% of the emissions and 40% of the energetic consumption in the EU. The decisions concerning urban planning coming from the EU, the technologic innovations in the actual and virtual world, and the new lifestyles have resulted in a new impulse of construction with the inevitable consequences on the real estate market.

As Scenari Immobiliari General Director Francesca Zirnstein explained: “The contents of this year’s edition offer a global outlook on the new challenges represented by energetic sustainability, going through the urban planning strategies related to smart cities, and finally single buildings. The Observatory aims at evaluating the consequences of the recent innovations in real estate in regards to energy efficiency, the reduction of the environmental impact and the improved comfort and safety of interiors”.

Source: Il Sole 24 Ore

Translator: Cristina Ambrosi

 

Retail decreased by 6% with 2.2 billion invested in 2018

18 January, Fashion Network

In 2018 the volume of real estate investments in Italy amounted to over 8.8 billion. Investments reduced by 22% from 2017, a record year with investments for over 11 billion. CBRE forecasts that 2019 will be steady, even though with a boom of the hotel segment that reported 1.3 billion euro last year, continuing the 2017 trend.

The reduction of investments reported in 2018 is partly due to the political uncertainty that characterised most of the past year and that caused the spread to rise. As a result, the issuance of new loans slowed down, deterring or delaying some operations.

Retail is the segment that reacted best to the reduction of the investments reporting volumes for 2.2 billion, although reporting a slight decrease (-6%) compared to 2017. Offices reported total investments for 3.4 billion, registering a 17% decrease from the previous year. Milan remains the primary market for investors (over 2 billion). Rome is aligned with the results reported in 2017 with invested volumes for 1.1 billion. The two cities continue to polarise the market.

Source: Fashion Network

Translator: Cristina Ambrosi

Benson Elliot acquired the Segreen and Nest in Segrate business parks from BnpParibas and Generali Re

21 January, Bebeez

The UK-based private equity fund manager Benson Elliot acquired 100% of the shares of an Italian real estate investment fund, ER Office Fund 3 (“EROF3”) managed by Europa Risorse SGR. The company bought two adjacent business parks in Segrate, Milan.

The two business parks have been acquired through separate operations. Segreen Business Park was sold from the fund Opera managed by Bnp Paribas sgr, and it includes class-A offices for about 27 thousand Sq m distributed between two buildings, plus a parking lot with over 900 spaces. The park is located in Via San Bovio 3 and has obtained the highest environmental certifications (LEED Gold and Platinum) between 2011 and 2013. 90% of Segreen Business Park is occupied by multinationals such as Kraft Heinz, Lenovo and Zimmer Biomet. The acquisition of Seegreen Business Park was partly funded by Deutsche Pfandbriefbank AG and assisted by Hogan Lovells through multiline funding for 74.4 million euro in total. Simmons & Simmons and LED Taxand assisted Europa Risorse sgr in the acquisition, while BnpParibas Reim Sgr was assisted by BonelliErede.

Nest Business Park was acquired by Benson Elliott from the Toscanini fund managed by Generali Real Estate. It includes office space for 18 thousand Sq m distributed between three buildings and a parking lot with 500 spaces. The business park is surrounded by the beautiful landscape of Segrate. It was built in the Eighties to accommodate the former Microsoft Italian headquarters. The property is currently vacant, and it offers the opportunity for being requalified and integrated with Segreen Business Park. Nest, in fact, will be fully requalified and integrated, resulting in a more comprehensive offer and a larger surface by consolidating the two business parks. The finished product is meant to get the LEED Gold certification and to provide innovative services such as restaurants, a conference centre, a kindergarten and a gym.

Benson Elliot senior partner Joseph De Leo commented: “We’ve been operating on the Milan market for decades. The market is very interesting at the moment, as the rising demand for class-A offices has to deal with a limited offer”.

Source: Bebeez

Translator: Cristina Ambrosi

Benson Elliot acquired an office portfolio in Milan

21 January, Monitor Immobiliare

The UK-based private equity fund manager Benson Elliot acquired 100% of the shares of an Italian real estate investment fund, ER Office Fund 3 (“EROF3”) which acquired a business park in Segrate, north-east of Milan. EROF3 is managed by Europa Risorse SGR, the asset manager for the regulated funds owned by Banca d’Italia.

The two business parks have been acquired through separate operations from BNP Paribas SGR and from the Toscanini Fund managed by Generali Real Estate S.p.A. SGR.

Segreen Business Park was acquired from BNP Paribas SGR, and it offers about 27 thousand Sq m of class-A office space distributed between two buildings, including 900 parking spaces. The building was built between 2011 and 2013 according to the highest environmental standards (Gold and Platinum LEED certification). 90% of Segreen Business Park is occupied by multinationals such as Kraft Heinz, Lenovo and Zimmer Biomet.

Nest Business Park in Segrate was acquired from Toscanini Fund, a fund managed by Generali Real Estate S.p.A. SGR. It has a surface of 18 thousand Sq m occupying three buildings and a parking lot with over 500 spaces. Built in the Eighties, it used to be the former Microsoft headquarters, and it’s currently vacant.

Benson Elliot Senior Partner Joseph De Leo commented: “We’ve been operating on the Milan market for decades. The market is rather interesting at the moment, as the rising demand for class-A offices has to deal with a limited offer. Thanks to our excellent position on the market, we’re able to offer offices in such a strategic location”.

Source: Monitor Immobiliare

Translator: Cristina Ambrosi

What a bargain those NPLs

19 January, Milano Finanza

Intesa Sanpaolo and Intrum started working on the collection of bad loans. The task is rather complex, considering a market such as the Italian one where slow justice is often an obstacle for creditors. Nevertheless, thanks to a strong team and solid investments, Intrum is positive about the future. “The new Italian management team is the right mix of expertise from Intrum, Intesa Sanpaolo and from outside”, explains Marc Knothe, Intrum Italy Ceo, to Milano Finanza. “Antonella Pagano, Business Development & Operational Services Director, comes from Intrum, as well as Antonio Rabossi, Legal & Compliance Director. Alberto Marone, Investment Director, and Alessandro degli Esposti, Client Management Director. From Intesa Sanpaolo, we have Stefano Marchetti, Operations Director, Salvatore Ruopolo, Head of Real Estate and Leasing, and Massimo Martinoia, HR Director. Finally, Enrico Baretta, Head of Internal Audit and Pierpaolo Sogli, Chief Financial Officer, come from other companies”.

Have you already started working on the credits of Intesa?

Of course. The joint venture headed by Giovanni Gilli has been operational since December. This final step completes a process started in 1986 that went through the merger between Intrum and Lindorff, the acquisition of Caf, Gextra and Crosfactor, and the expansion of our team, that has gone from 400 to 950 people thanks to the agreement with Intesa.

Are you also looking at other portfolios?

Yes. We’re one of the first three servicers in Italy, but we want to expand our market share even further through the direct purchase of portfolios as well as through management contracts. We’re interested in the platforms that several banks have recently put in the market. We’re currently working with other banks, and we want to continue doing that also in the future.

In these last few months, international investors have been worried by the country risk represented by Italy. What is your approach?

When we announced the agreement with Intesa, we were aware of the political changes currently going on. As investors, however, we have a long-term perspective, and we’re not paying much attention to short-term volatility.

What data are you receiving from the collection curves?

It depends on the portfolio, but, thanks to the recent reforms and the improvement of the legal procedures, times have shortened, especially in certain regions. Generally speaking, the market is aligned with our financial forecasts.

The ECB requires banks to write off new credits in a short time, bad loans included in some cases. With such deadlines, how a full collection would be possible?

Based on our experience, unsecured credits have shorter collection times. Secured loans have some elements that influence their collection and times are generally longer, although we’ve recently seen an improvement of court proceedings.

You manage a significant share of clients of a big bank. What is your collection approach?

As a group, we’re present in many countries, and we follow a precise ethical code. For the banks we work for, reputation is fundamental, and our objective is always to find a friendly compromise with the debtor.

Which developments do you expect from the Italian servicing market?

Technology is definitely important, as the servicing activity requires managing an increasing amount of data. Besides, international investors entered the Italian market with a short-term perspective. For this reason, they might soon put for sale their management companies. We have a long-term view, and we’re always ready for new acquisitions. I expect a consolidation.

Source: Milano Finanza

Translator: Cristina Ambrosi

Orion to join SeiMilano project

21 January, Pambianco Design

Proiezioni Future, the joint venture between the Milan-based developer and construction company Borio Mangiarotti and the international alternative investment company Varde Partners entered a sale and contract agreement through Orion European Real Estate Fund V. The fund is promoted and collected by Orion Capital Managers in order to develop an office real estate complex inside the requalification project SeiMilano. The site is located in Milan near the Bisceglie metro station.

SeiMilano was born from the joint venture between Varde Partners and Borio Mangiarotti at the end of 2017. It’s one of the biggest requalification projects concerning a suburb of Milan, with the aim of creating a new “living experience” according to the latest energy saving, quality of life and social inclusion criteria. The masterplan is signed by the architect Mario Cucinella, and it concerns the development of houses covering approximately 100 thousand Sq m (a part of which will be destined to regulated housing) and of over 30 thousand Sq m for class A offices and about 10 thousand Sq m for retail.

Orion Capital Managers decided to invest in the project acquiring over 30 thousand Sq m of class A GLA, for a total estimated investment of over 100 million euro. Strategically located, the offices will be close to the Bisceglie metro station and to a new park which will be as big as Sempione. The new park is signed by the internally-known landscaper Michel Desvigne.

“We’re delighted that another international investor decided to join SeiMilano, taking care of the office development part. Orion will develop new-generation offices which will enhance the quality of the whole project”, commented Edoardo De Albertis, Borio Mangiarotti Ceo.

Source: Pambianco Design

Translator: Cristina Ambrosi

Unipol relaunching Torre Velasca with culture and luxury apartments

21 January, Il Sole 24 Ore

Unipol announced the completion of the requalification and re-organisation process of 13 flats at the 19th, 20th and 21st floors of Torre Velasca in Milan. The apartments have been completely remodelled preserving at the same time the original finishing, doors, windows and structures. The remodelling, as well as the concept of the 13 apartments, is signed by the architectures of Lissoni studio, with the collaboration of Living Divani, Porro, Boffi, Kartell and Flos, which selected the pieces of furniture and the furnishing, the lights and kitchen components.

The apartments come furnished with cutlery, plates, small appliances, TV and washing machine. The atmosphere reminds of the Milan in the Fifties. Designed by Bbpr under commission from Rice and Arturo Danusso, the tower was built in 1957, becoming one of the symbols of Milan. All the elements have been carefully studied, from the styling by Valeria Girardi to the choice of accessories and the selection of the architecture books and magazines, given the iconic status of Torre Velasca.

The apartments are part of the Domux Home luxury apartments collection. As Unipol explained, the objective is to turn business and leisure travel into an occasion to discover and experience the city of fashion and design from a privileged point of view. This will be possible thanks to the incomparable view of the city from the tower and by the renewed interest of Milan for vertical living. The Unipol project has a wide range, for the Domux Home, the brand of the insurance company dedicated to temporary accommodation, offers apartments combining luxury and design in the group’s prime buildings in the city centre.

The Domux Home residences were launched in Florence in 2017 (four apartments in Piazza Repubblica and seven apartments in Via Ricasoli). The flats in Via Ricasoli are centrally located, being only 600 metres from the Gallery of the Academy and few steps away from Duomo. The four penthouse apartments in Palazzo Levi in Piazza della Repubblica offer a view of Santa Maria del Fiore. Palazzo Levi is a neo-renaissance building built in the late 19th century. It was designed by the architect Giuseppe Boccini under the commission of the banker Levi. This impressive building is known for accommodating the famous Paszkowski and Gilli cafès. In Milan, the 26-storey Torre Velasca is part of Urban Up, the Unipol’s real estate requalification plan to promote the Italian architectural heritage represented by the assets included in the group’s portfolio.

The apartments offer stunning views of the city and excellent design. The prices of the short-term rentals are definitely reasonable, given the story of the tower and its atmosphere. The next step of Unipol Domux Home will be Torre Galfa, which is also included in the Urban Up requalification project with the objective of turning the building in an innovative multifunctional space, accommodating a luxury business hotel, design apartments and a public lounge terrace. Torre Galfa was built between 1956 and 1959 by the architect Melchiorre Bega to accommodate the offices of the oil company Sarom. It was sold in 1980 to Banca Popolare di Milano, then abandoned in 2001 and sold again five years later to Fondiaria-Sai (also Torre Velasca is another Fondiaria-Sai operation). The requalification works will be completed in 2019. Torre Galfa will accommodate Innside Melià (from -2 to the 12th floor), the Halldis temporary apartments (from the 13th to the 15th floor), luxury apartments Domux Home (from the 26th to the 28th) and the Rooftop restaurant (29th and 30th floors) for which four big brands of the fine dining world are competing.

Moreover, Torre Velasca is also to host Tower Tales, a series of cultural appointments combining design, art and sound. The project is promoted and organised by Urban Up-Unipol Projects Cities and will take place on the tower’s ground floor which will be open to the public. The first protagonist of Art Tales will be the post-minimalist artist Keith Sonnier, a pioneer in the use of light in sculpture. His videos from the Sixties will be exhibited till the 16th February 2019 with the collaboration of Converso Offsite. The works, displayed for the first time in Italy, offer a different version of the artist, who is internationally known for his neon sculptures.

SoundTales was inaugurated on 7th November with a concert of the world-famous guitarist Bill Frisell. It was the first of four jazz music events organised in collaboration with Blue Note. The next appointments will see the participation of Sarah Jane Morris on 22nd January, Andrea Motis on 27th February, and Roger Rota in March 2019. The concerts are reserved for the residents of Domux Home and will be accessible only through invitation.

DesignTales started with the launch of the second edition of the contest “Velasca design project — ideas under the tower” in occasion of the 60th anniversary of the Velasca tower. The participation of schools was unanimous: Domus Academy, Ied, Marangoni, Polimi, Naba and Politecnico will compete with works based on the theme of light by designing a lamp for the Velasca public spaces. The jury will be composed of Gilda Bojardi, Antonio Citterio and Fulvio Irace. The deadline to submit the works is the 5th February 2019, and the awards ceremony will be in April 2019.

Source: Il Sole 24 Ore

Translator: Cristina Ambrosi

Guber Banca and Barclays acquired an NPL portfolio from Banca Valsabbina for 150 million

08 January, Bebeez

Guber Banca and Barclays Bank adjudicated the NPL portfolio of Banca Valsabbina for a nominal value of 150 million as in June 2018.

The portfolio includes secured and unsecured loans, and it will be acquired through securitisation. The special purpose vehicle will issue untranched securities which will be purchased by Guber Banca and Barclays Bank. The operation includes over 1,300 holdings, 30% of which are secured, 70% are unsecured and mainly located in northern Italy, concentrating in Lombardy, especially in the province of Brescia. Guber Banca will take care of the servicing activity. Freshfield Bruckhaus Deringer was the legal advisor for the buyer.

This is the second operation of the partnership of Guber and Barclays after the transaction completed last July together with Värde Partners concerning an NPL portfolio originated from 53 credit unions, rural banks and cooperative banks for a total gross value of 1.397 billion euro. Besides, Värde has held 33.3% of Guber Banca since March 2017, while the remainder of the capital is held by the founders Francesco Guarneri and Gianluigi Bertini. In December 2018, Guber Banca bought from UniCredit Leasing an NPL portfolio worth approximately 170 million euro with underlying leasing contracts under the Italian Law.

Managing NPLs for about 9 billion between on its own and on behalf of third-parties, Guber Banca places fifth in the servicer chart in terms of volumes of managed NPs, as reported by PwC based on the figures dated 30th June 2018. The average ticket of the credits in the portfolio was 60 thousand euro at the time, mainly represented by unsecured credits (80%).

Source: Bebeez

Translator: Cristina Ambrosi